Travel industry poised for boom in Asia Pacific

Real Estate April 01, 2019 01:00

By Somluck Srimalee
The Nation

9,505 Viewed

The Asia Pacific region is expected to be the standout region from a growth standpoint, with hotel investment volumes forecast to grow by 15 per cent year on year in 2019, according to research by JLL’s Hotels Research team for Asia.



The research said that Japan is expected to be one of the most active markets in 2019, with investor sentiment driven by the 2019 Rugby World Cup and the 2020 Tokyo Olympic Games. Investment momentum will continue to rise as investors explore selling hotel assets to capitalise on the tourism boom.

Singapore is currently riding the wave of a boom in hotel land sales, which has reignited the interest of wouldbe sellers who are considering to sell their hotel properties. In a tightly held market such as Singapore, we expect to see heightened sales activity as owners exit at record prices and newcomers seek long-term strategic opportunities.

With sustained demand in international visitor arrivals, robust trading performance, continued infrastructure development and political stability, Bangkok, as well as its key resort markets of Phuket and Koh Samui will remain highly soughtafter by investors.

It would be another year of strong cross-border transactions activity for Australia, particularly in Sydney, Melbourne, Brisbane and Perth, which will remain firmly on the radar of the Asian buyers.

Lastly, we see Maldives taking the centrestage in the Indian Ocean as new capital sources enter the market in search of higher-yield opportunities as we witness several landmark sales likely to conclude during the course of the year.

The top three hotel trends in 2019 are:

Experience economy reaches the luxury sector: Modernday luxury consumers are increasingly seeking out experiences, placing less emphasis on acquiring material goods. Hotel markets are seeing strong demand for highend experiential luxury travel.

Hotels embracing coworking: There has been a strong demand for communal workspace as companies increasingly offer flexible working policies. Hotel operators are maximising real estate and boosting revenue by creatively repurposing existing, under-utilised spaces.

New brands a beacon for growth: With operating costs for fullservice hotels continuing to inch up, and development costs for those hotels with vast facilities dampening investment returns in many markets, we expect to see top companies launching new brands, focusing on development effort on their select brands to drive distribution.

Meanwhile, the latest research by Collier International says that the travel industry looks set to close the year on a high note, thanks in part to the insatiable wanderlust and bounce-back in corporate demand. Tourism arrivals to the Asia Pacific region are expected to grow by 6 per cent year on year in 2018, continuing a steady period of growth witnessed since 2010, as the middle-income population continues to soar across the region.

The growth momentum is expected to spill over into 2019, rising at a pace of circa 4.5 per cent with tourism arrivals in the region reaching record levels. Growth continues to be mainly driven by China and India with the latter set to expand as its gross domestic product per capita improves along with its robust economic growth.

Revenue per available room (RevPAR) growth in the region is closely correlated to that of economic performance in Emerging and Developing Asia. This highlights the importance of intraregional and domestic tourism to destinations, the latter of which is sometimes overlooked.

According to STR, RevPAR (in US dollar terms) across Asia Pacific improved by a robust 5.7 per cent year to date August 2018, with China, Indonesia, Thailand and Vietnam being the main drivers. Myanmar and Taiwan were the worst performing markets.